St. Paul Mercury Insurance Company, a Minnesota corporation v. Navigators Specialty Insurance Company, fka NIC Insurance Company, a New York…

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
ST. PAUL MERCURY INSURANCE
COMPANY, a Minnesota corporation,
Plaintiff-Appellant,
v.
NAVIGATORS SPECIALTY
INSURANCE COMPANY, fka NIC
Insurance Company, a New York
corporation,
Defendant-Appellee.
No. 14-56723
D.C. No.
8:13-cv-00802-JVS-AJW
MEMORANDUM*
Appeal from the United States District Court
for the Central District of California
James V. Selna, District Judge, Presiding
Submitted February 10, 2017**
Pasadena, California
Before: GRABER, BYBEE, and CHRISTEN, Circuit Judges.
Plaintiff St. Paul Mercury Insurance Company and Defendant Navigators
Specialty Insurance Company both insured a subcontractor that was sued for
FILED
FEB 14 2017
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
* This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
** The panel unanimously concludes this case is suitable for decision
without oral argument. Fed. R. App. P. 34(a)(2).

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performing faulty construction work on a retaining wall. Defendant denied that it
had a duty to defend the subcontractor. The subcontractor settled the underlying
case. Plaintiff paid the entire amount of the settlement and then initiated this
action, seeking declaratory relief, equitable subrogation, equitable contribution,
and equitable indemnity. The district court granted summary judgment to
Defendant, and Plaintiff timely appeals. On de novo review, Reese v. Travelers
Ins. Co., 129 F.3d 1056, 1059–60 (9th Cir. 1997), we affirm.
Defendant’s policy did not cover the loss. The underlying case against the
subcontractor alleged only damage caused by "subsidence," as defined in the
policy. The policy excluded "subsidence" from coverage, including the duty to
defend.
Even if the initial complaint in the underlying case could be read to allege
property damage other than that caused by subsidence, Defendant’s investigation
clarified that the only damage Plaintiff claimed was damage caused by subsidence.
See Waller v. Truck Ins. Exch., Inc., 900 P.2d 619, 628 (Cal. 1995) (holding that,
when extrinsic facts eliminate the potential for coverage, an insurer may decline to
defend even if the complaint had suggested potential liability). That is, the
investigation eliminated any possibility of coverage.
AFFIRMED.
2

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